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A “Reasonable” Interest Rate

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ByInspiredRetired

L1: A “Reasonable” Interest RateIf I”m ultra-conservative on the reasonable interest rate and choose much less than 120% of theFedmid-term rate– say 3%… is this any kind of red flag for the IRS? I”ve heard and read about the danger of going overwhat”s considered reasonable, but not much on being ultra-conservative.2007-04-05 08:27, By: InspiredRetired, IP: [72.94.129.162]
L2: A “Reasonable” Interest RateYou can be as conservative as you want and select any rate between zero and the 120% AFR.
A better option might be to use the maxium rate allowable and divide the account into 2 accounts – one to fund the SEPP at teh maximu rate and one for emergencies.
Remember, under 2002-62 there is nopenalty if you run out of funds.2007-04-05 08:50, By: Gfw, IP: [74.136.109.63]

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